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ARTHUR CYR: Placing a call has changed everything

Sentinel & Enterprise

Updated:
06/16/2014 06:30:44 AM EDT

By Arthur I. Cyr

The telecom hills are alive with the sounds of mergers, with two at crescendo. In February, Comcast agreed to purchase Time Warner for $45 billion. AT&T last month announced purchase of DirecTV, which if confirmed is valued at about $48.5 billion. Other possible deals provide background music, including a Sprint-T-Mobile merger.

In formal structure, Comcast and Time Warner use cable, AT&T emphasizes wireless, DirecTV employs satellites, and Netflix streams content. Such distinctions remain important, but are less and less defining as corporations' delivery technologies and content evolve and blend.

Last year there were similar big deals involving the giant companies that design, manufacture and market pervasive portable phones. As in the past, telephones, computers and good old TVs are helping to democratize the availability of information. Two continuous characteristics are that interplay between technology and society is complex, and government is crucial.

In September, Vodafone announced sale of the firm's 45 percent stake in Verizon Communications. The deal involved $130 billion in cash and stock, making this one of the largest commercial transactions in history.

Also, Microsoft purchased struggling Nokia, the Finnish paper company that helped launch the modern mobile phone. The deal addressed criticism of Microsoft for caution despite holding a mountain of cash.

The global smartphone operating system market currently is defined largely by Apple and Google.

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The former pioneered the user-friendly desktop computer. Co-founder Steve Jobs eventually was forced out in a power struggle, only to return and engineer a brilliant turnaround centered on the iPod, iPhone and iPad. The devices have grown smaller even as the universe of readily available information rapidly expands.

Information transmission is now characterized by vast rapid change, but at the start telephone and computer companies enjoyed much more predictable structured business environments. Major corporations largely controlled stable markets, in contrast to today.

Historically concentrated corporate power has threatened the public interest. John D. Rockefeller brilliantly built the Standard Oil Corporation into a powerful foundation of the American industrial economy, but monopoly of oil and kerosene production was also dangerous. Standard Oil could literally dominate the U.S. economy and shut down the government, including the military.

Antitrust prosecution broke up Standard Oil in 1911. Investigative journalist Ida M. Tarbell was instrumental in this result through her book "The History of the Standard Oil Company."

Computer and communications companies also faced federal prosecution, though none had the power of Standard Oil. In 1969, the U.S. Justice Department went after IBM but dropped the suit in 1982. Entrepreneurs led by Apple were significantly weakening IBM's hold. The market triumphed over regulators.

The Feds had more success in pursuing AT&T with an antitrust suit begun in 1974. In 1984, the corporation was broken up. Southwestern Bell eventually purchased surviving long-distance carrier AT&T, re-adopted the name, and became a principal rival of Verizon.

In 1894, Ida Tarbell moved back to the U.S. after several years in Paris. Rather than rejoin family in Titusville Pennsylvania, she settled in New York City, a courageous daring move then for a single woman.

However, as Steve Weinberg points out in "Taking on the Trust," his book about her, electricity was already transforming life in the great metropolis. Electric trains and lights permitted relatively safe, comfortable travel. Over time, technology was making life easier for the average person. Consumers benefitted from growing freedom of movement.

Investigator Tarbell also made excellent use of the newly available telephone.

Arthur I. Cyr is Clausen Professor at Carthage College and author of 'After the Cold War.' Contact him at acyr@carthage.edu.

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